This shame game just might rein in CEO pay where previous attempts have failed, said Gretchen Morgenson at The New York Times. Once the pay gap is boiled down to an “easily graspable and often decidedly shocking number,” employees and consumers might actually protest, and red-faced corporate boards will be forced to act. As soon as the outlandish ratios begin coming out, we’ll hear from “corporate apologists” that CEOs earn their megamillions, because they deliver impressive returns just like “star baseball players or movie stars,” said Robert Reich at Huffington Post. “Baloney.” The stock market has surged so much over the past three decades, and corporate tax rates have become so generous, that a CEO could have “played online solitaire” all day long and still watched the company’s share price soar
The rhetoric behind CEO pay has become so inflamed that I doubt it is possible to shame them into getting less pay as suggested above. The basic problem is that these guys think they actually deserve the millions handed over to them. Most of their egos are so large that they think they are the saviors of their industries.
Carly Fiorina who is currently running for president is a good example of that. Before she left AT&T for her brief stay at HP she made a decision to move the business unit that I had worked in for almost thirty years. She decided to put it in a joint-venture with a foreign company. To us on the inside it became totally obvious that this merger was a huge mistake. The cultural clash that resulted basically brought down the unit and it was sold to a Chinese manufacturer for pennies on the dollar within two years of Carly’s great insight.
She then went on to likewise almost destroy HP. Her decision to buy another computer manufacturer was flawed from the very beginning and most everyone knew it from the get-go. But like a true huckster she manages to find a statistic here or there to seemingly say she made wise decisions. With the CEO label attached to her name Carly now thinks she can run the country better than anyone else. The tragic thing about it is that some actually fall for her hype. Her golden parachute was more than $40 million so she has plenty of money to spend on her grandiose scheme to become the leader of the free world.
The basic problem with the entire corporate leadership structure in this country it that it is almost entirely managed by a very small group. They are all, for the most part, CEOs themselves and serve on each others boards. The old saying “you scratch my back and I will scratch yours” is the current mantra for corporate America today.
Since most stock today is now in the hands of mutual funds companies who themselves are made up of lavishly provided corporate heads it is almost impossible for any small group of investors to effect a change in this structure. Somethings got to change to reign in CEO pay and parachutes, I just don’t know that it is…
I am that not so smart wise guy in this area…